Explained by Yielro
Where does stablecoin yield come from?
By Yielro · Updated
In a stablecoin lending strategy, yield can come from borrowers paying for access to liquidity. The stablecoin itself does not automatically pay a return. Rates depend on the particular lending market and can change. A displayed APY annualises a rate under assumptions; it is not a promise of what you will earn over the next year.
Separate the token from the strategy
EURC and USDC identify the assets. A vault or lending market describes where those assets are used. Issuing a stablecoin and operating a lending strategy are different activities. Read the strategy documentation to understand the actual source of the yield.
Why rates change
Borrowing demand, available liquidity, market parameters and any incentives can affect the rate. A short-lived incentive is different from recurring borrowing income. A rate observed today can change before or after a deposit.
Reading APY
APY expresses an annualised yield with compounding assumptions. It is different from a cash payment that has already been received. Compare the observation time, measurement method, deductions and the conditions under which the rate could persist. Past observations do not guarantee future results.
What Yielro displays
The homepage uses dated observations for supported strategies and displays an indicative customer APY. When the data is unavailable or expired, the rate is unavailable rather than replaced with an invented value. Currency conversion, transaction costs, taxes and currency movements can affect the eventual result separately.